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TRN Index--February 2004.
CONVERSIONS--Plaintiffs Focus on Missing Minutes in LaSalle's Conversion.
Coverage of the recent amended complaint field in Hughes v. LaSalle,
a common trust fund to proprietary mutual fund conversion
CONVERSIONS--Roadmap for Converting.
If a trustee is going to use proprietary, rather than third-party mutual
funds, Yale Law professor John Langbein stresses the need for clear documentation
and "honest disclosure" in his report for plaintiffs in Hughes v. LaSalle.
CONFLICTS OF INTEREST--Opting for Third-Party Investments, Institution
Says Own Rates Not Competitive.
Even when interest rates are lower than competitors', fiduciaries have
justified the use of own-bank investment vehicles for short-term cash because
of indirect benefits, such as convenience and flexibility. Nevertheless,
some banks are opting to move money to competitors.
ERISA--Settlements in Litigation: Potential Prohibited Transaction.
To the surprise of many attorneys and fiduciaries, the U.S. Department
of Labor in 2003 proposed a class exemption asserting that a settlement
involving a plan and parties in interest could be construed as a prohibited
ESOPs--IRS Shuts Down S Corporation Abuse.
The IRS is cracking down on preferential tax treatment of corporation
earnings sheltered through an employee stock ownership plan.
TAX SHELTERS--IRS Has Funds to Expand War on Tax Shelters; Banks
The IRS is aggressively seeking to halt the promotion of abusive tax
shelters. Having successfully won its recent offensive against leading
accounting firms, sources say it is now focusing on the actions of related
parties, such as banks.
OCC--Preemption Hearing: Mixed Message for OCC.
The OCC received both praise and reprimand from House members during
the first hearing on its recently issued preemption rule.